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The sentence you have quoted is not standard English: "Students have to take their entire school books home..." is very strange. Usually one would say something like "Students have to take all their school books home...", unless you mean something unusual like "Students have to take home any school books that remain in one piece".
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Mark BeadlesAug 29 '12 at 17:10

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I'm pretty sure "school" in this sentence is an adjective. If you are referring to the awkward use of "entire", it can only really be applied to "books". Obviously, it is normally implied that books are whole, and the sentence itself should be reworded, regardless of the use of "school".
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DaniAug 29 '12 at 17:17

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school is a collective noun in the phrase school of fish. When talking about students, the two different etymologies (crowd/place of learning) may have merged to some extent, but not so far as to make me happy with "The school have required each student to take books home".
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HenryAug 29 '12 at 17:18

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Agree with Mark from a UK perspective at least: "entire" doesn't tend to be used with a plural.
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Neil CoffeyAug 29 '12 at 18:32

Dani - it's obviously just an arbitrary analysis and there are some grey areas, but overall it probably makes more sense to say that "school" is still a noun (part of a N + N compound). For example, "the black books" > "the books are black", but not "the school books" > "*the books are school".
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Neil CoffeyAug 29 '12 at 18:35

3 Answers
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This seems to me to be a trick question. School can be a collective noun, but only referring to fish and so on. 'The school consisted of a thousand tuna' would be a sensible sentence, in which school is a collective noun; at a stretch, it could also be called a collective noun in 'If the culprit does not own up, the whole school will be in detention'. Perhaps the examiner hopes to catch people out with this, and intends the correct answer to be books or students. If so, he has misunderstood collective noun: it means specifically the word for a group. like herd or gang. So there is no collective noun in that sentence; maybe that's the trick.

The term school when used to refer to a group of individuals subscribing to an approach to art, such as the Hudson River School, is definitely a collective noun. It is not a single building or even a formal institution.

As noted in comments, school when refering to a group of animals is also collective.

@AndrewLeach So, are you saying that the worksheet Henry linked to is wrong too?
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its_meAug 29 '12 at 18:47

@its_me: I think it's clear from many comments and answers here that most if not all native speakers think the "grammar book" you got your own example from is "wrong" (or at least presents phrasing that's highly questionable to native speakers). Neither Henry's nor your citations use what I'd call a "collective noun" anyway. But the plurality of "school" can "flexible" in certain contexts - in "The school elects a new head boy every October", for example, not everyone would be deeply unhappy with the plural verb form "elect".
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FumbleFingersAug 29 '12 at 21:38

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I was not claiming the worksheet was correct; just that students was the answer it gave. I personally think that is not a collective noun there.
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HenryAug 29 '12 at 23:06